What are the world’s most crypto-friendly countries?

If you had a million dollars worth of cryptocurrency you wanted to convert and withdraw to your bank account, what would be the best way to do it – and importantly, where would you do it?

If you live in a country like India, your hypothetical jackpot would pose a serious dilemma as the Reserve Bank of India announced in 2018 that it would no longer provide services to any person or business dealing with cryptocurrencies. Today, no bank in the country will accept funds from an exchange processing crypto-to-fiat withdrawals on behalf of clients.

In China, you’d also find yourself in a sticky situation. In September 2017, domestic authorities banned local crypto exchanges and initial coin offerings (ICOs) from operating.

While some people have had to struggle to get their foot in the crypto door, others have been more fortunate by virtue of the country they live in.

In this article, we’ll look at some of the countries that have been welcoming crypto with open arms.

Japan

Japan is known to have some of the most progressive cryptocurrency regulations in the world. As a result, about 10% of the total global traffic to crypto exchanges comes from Japan.

In 2017, the country recognized cryptocurrency assets as legal tender and established clear tax guidelines for investors. This was no small feat, as the reluctance of national tax authorities in many regions to issue detailed guidance on virtual assets has been a serious concern for individuals and businesses.

The Japanese crypto industry has also been given the space to self-govern in a manner that is compliant and adaptive. The Japanese Virtual Currency Exchange Association (JVCEA), comprises more than twenty organizations that have the collective authority to pass and enforce regulations and standards for cryptocurrency exchanges in Japan.

Liquid is a proud member of the JVCEA as well as being the first global crypto company licensed by the Japan Financial Services Agency.

Switzerland

Zug, a canton in Switzerland, became known as “Crypto Valley” after it passed several progressive laws regulating crypto use and related businesses. The Swiss state railway now even accepts BTC for ticket payments. A number of Swiss banks, like Falcon Private Bank and Julius Baer, also allow direct transfers and deposits of select cryptocurrencies.

Singapore

In Singapore, another country where Liquid has an office, Bitcoin and other cryptocurrencies are viewed by legal authorities as goods and not as money. This means any company operating with BTC or altcoins pays just 7% in tax. In 2018, Singapore finalized its regulatory framework for crypto payment services.

Luxembourg

When it comes to tax perks, this tiny landlocked European nation of under 600,000 people is a serious contender. The Commission de Surveillance du Secteur Financier (CSSF) was one of the first EU domestic financial regulators to provide commentary on cryptocurrencies with its official “Bitcoin Communiqué 2014”.

In Luxembourg, cryptocurrencies are treated as intangible assets, which means they aren’t subject to income tax until they are disposed of. Furthermore, all cryptocurrency transactions are exempt from VAT.

Hong Kong

Hong Kong has what is known as a “light-touch regulatory environment”. Bitcoin and other cryptocurrencies are exempt from VAT and capital gains taxes and are seen as commodities rather than currencies. The famous port city already boasts a number of 24/7 cash-to-BTC ATMs.

Malta

The parliament of this tiny European island nation has taken a decidedly pro-Bitcoin stance, with the prime minister even calling crypto “the inevitable future of money”. In July 2018, Malta’s parliament passed three bills providing a framework for blockchain technology (the Digital Innovation Authority Act, the Innovative Technological Arrangement and Services Act, and the Virtual Financial Asset Act).

All the other islands…

Malta isn’t the only island with an aggressive pro-crypto stance. Gibraltar, Bermuda, Vanuatu Puerto Rico, Mauritius, the Cayman Islands and the Seychelles are also fashioning themselves as crypto havens. Gibraltar, for example was the first country to define rules governing ICOs while Vanuatu became the first citizenship by investment country to offer payment in Bitcoin.

The number of countries that are taking a positive stance towards cryptocurrencies is on a steady rise as governments and regulators recognize the potential to transform legacy financial systems.

This content is not financial advice and should not form the basis of any financial investment decisions nor be seen as a recommendation to buy or sell any good or product. Trading cryptocurrency is complex and comes with a high risk of losing money, particularly if you trade on leverage. You should carefully consider whether trading cryptocurrencies is right for you and take the time to learn how trading works and decide how much money you are prepared to lose.